February 2025 Trump Tariff Warning

Hours before February 1, 2025, approached, the media reported a delay in U.S. tariffs against Mexico and Canada, to March 1. Unfortunately, the White House confirmed President Trump would proceed with the 25% tariff. Instead of a 60% tariff on China, the U.S. would slap 10% on its imports. The tariffs would have an impact on over $2.1 trillion worth of trade annually. The President cited a Feb. 1 deadline to halt fentanyl and other dangerous chemical ingredients from entering the U.S.Trump softened tariffs on Canadian oil from 25% to 10%. Investors may bet on minimal disruption for Canadian oil firms. The companies include Enbridge (ENB), Suncor (SU), and Cenovus Energy (CVE).Consumers will end up paying for most of the duties. This will add to U.S. inflation rates. Last week, the Federal Reserve halted its interest rate-cutting policy. Although Fed Chair Powell did not cite tariffs, he pointed out that current inflation rates are still higher than the 2.0% target rate.Avoid Automotive StocksAhead of the tariff warnings, investors avoided American automotive stocks. Ford Motor (F) fell below $10.00 last week, while General Motors (GM) fell by even more. GM posted earnings that included restructuring from its business in China. Its guidance also excluded the impact of tariffs.Investors bought Honda (HMC) and Toyota Motor (TM) stock instead.